Broadband Cable Association of Pennsylvania

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August 16, 2013

More and more, it is looking like the blackout of CBS stations in more than three million homes subscribing to Time Warner Cable could last until the start of the National Football League season on Sept. 8, analysts who are monitoring the situation said this week.

That would mean three more weeks without CBS programming for the cable subscribers. The contract dispute is approaching the two-week mark with no hint of an imminent settlement.

"I really think these guys are going to need the N.F.L. to add a sense of urgency to this," said David Bank, a media analyst with RBC Capital Markets.

Neither side in the standoff has mentioned any progress over the last several days. Both have continued to level charges and accusations of blame for Time Warner Cable's decision to remove CBS's stations in areas the cable company covers, which include subscribers in New York, Los Angeles and Dallas.

The issue centers on fees that cable companies are obligated to pay to broadcast stations for the right to retransmit them on their cable systems. CBS has asked for a substantial increase, widely estimated at a $1 per subscriber raise. Time Warner Cable has declared the demands exorbitant.

But the focus of the dispute is now additional rights to packages of programming that CBS sells to on-demand subscription video services like Netflix and Amazon. Time Warner Cable wants to gain access to that content; CBS insists it would mean Time Warner Cable was getting for free something it sells for hundreds of millions of dollars to on-demand services.

The only action on the conflict taking place in recent days has involved parties outside the negotiations. Three residents in Southern California filed a class-action suit against Time Warner Cable on Wednesday saying the plaintiffs would not have signed up with the operator had they known programming would be denied to them.

Several politicians including both California senators have urged the Federal Communications Commission to step in, but the agency's avenues of input are limited. If either side makes a complaint of bad-faith negotiating, the F.C.C. could potentially intercede but neither side has made such a complaint.

While representatives of both sides have said the negotiations continue, no one is predicting the end is in sight.
The N.F.L. season has been cited frequently as the bridge too far because of expected vociferous protests from customers missing games. The cable operator acknowledged at the start of the blackout that it was removing the CBS stations well ahead of the football season because it would lose leverage in the talks once the season began.

But Mr. Bank said the lack of progress thus far points to the need for the N.F.L. season to provide a deadline to generate movement. "We're going to follow this like a ping-pong game," he said, but added, "I would think now that it's going to take another several weeks." - New York Times